Comments on: Maragos warns of rising health insurance premiumshttp://libn.com/2010/04/16/maragos-warns-of-rising-health-insurance-premiums/
The premier source of Long Island news and data on business, economic trends and the region’s robust entrepreneurial sector.Tue, 03 Mar 2015 22:22:56 +0000hourly1http://wordpress.org/?v=3.5By: Robert Hoffmannhttp://libn.com/2010/04/16/maragos-warns-of-rising-health-insurance-premiums/comment-page-1/#comment-43087
Robert HoffmannFri, 16 Apr 2010 19:06:00 +0000http://libn.com/?p=38848#comment-43087I agree with Thomas Farrell. The entitlement issue keeps coming back over and over. And short term fixes such as hitting the reserves just hides the problem.
]]>By: Thomas Farrellhttp://libn.com/2010/04/16/maragos-warns-of-rising-health-insurance-premiums/comment-page-1/#comment-43080
Thomas FarrellFri, 16 Apr 2010 16:25:31 +0000http://libn.com/?p=38848#comment-43080The rates are increasing for many reasons. Most notably is the fact that health insurance carriers in New York are burdened with excessive government mandates such as community rating and guarantee issue. In addition to many other drawbacks, one effect has been the proliferation of HMO plans, which carry no degree of consumerism for members, which inevitably drives up claims made to the carrier, and eventually premiums for the member.

An example of non-consumerism:

Chris is and HMO member. Chris feels sick. Chris only pays $10 to see his doctor. When he sees his doctor, the doctor collects $10 from Chris, and sends a $90 bill to the HMO.

Chris does not see, feel, or care about the $90 bill, and only notices his $10 copay. So instead of using cheaper remedies such as over the counter medicines, he’d rather just go to the doctor at the first sign of sickness.

This notion multiplied over millions of members drives claims way up. Insurance companies must outweigh their claims with revenues collected from premiums, so they increase premiums.

Politicians such as Chuck Schumer neglect to understand this simple notion, and instead demonizes health insurance companies while he “puts pressure” on them to keep increases low.

In 2009 Nassau county comptroller and executive, Howard Weitzmann and Tom Suozzi, respectively, “forced” the NYSHIP to take the reserves it had been saving and apply it to last year’s “historic low” increases of 3.5%, surely a great political headline, but effectively it robbed those reserves for future members. Now there are no reserves, and that is why people will have to suffer with 13-22% increases.

This is a clear example of what happens when politics enters the world of economics. If you think our recent health care reform is going to improve things you’re wrong, it fails to address and implement market resolutions to the problem and instead creats more economically illogical mandates.

To get cheaper health insurance for your company consider using a Professional Employer Organization. You can learn about them, and shop the best ones all at once for free at http://peospectrum.com/.